What Money Can't Buy
✒️ Note-Making
🔗Connect
⬆️Topic:: ethics (moc) ⬆️Topic:: Economics (MOC)
💡Clarify
🔈 Summary of main ideas
- Markets leave their mark - Commodifying something into a product or applying a market logic on it changes the nature of the thing itself. Paying for blood donations crowds out altruistic intentions, therefore changing who gives blood and the quality of blood given. Commodifying has a corrosive aspect, replacing normative values with an "everything has a price" and "it is okay as long as you can pay" mentality of "rational" cold calculated econs instead of human beings with morals and values.
- Efficiency is not the only metric - Even if commodifying something improves general welfare, for example advertising on schools is better than having no schools at all, we should still consider the harm to our values as an additional cost, a negative utility of sorts.
🗒️Relate
⛓ Life lessons, action items
🔍Critique
✅ by following this method, what will happen?
❌ the logical jumps, holes or simply cases where it is wrong...
🧱 Implementations and limitations of it are... It is unclear what the goal of the book is, perhaps just to explain why some things should be outside of market influence, and perhaps we need to be more politically active about it, but even these two statements are a subtext of the book, and not the main point.
🗨️Review
💭 my opinions on the book, the writers style... Honestly I expected more from a philosopher. The book is 10% statements and 90% examples. The examples are repetitive, American specific, and don't always help convey his argument. He expects that the examples by themselves incur sufficient "intuitions of disgust" that we will agree with the argument he is trying to make, instead of diving deeper into the reasons behind those intuitions.
🖼️Outline
📒 Notes
Introduction - on Markets and Moral
Nowadays, there's hardly anything that hasn't been commofidied. You can buy a kidney, a child, a better prison, better healthcare, and even have more political influence. You can also almost sell anything, from your body, to your time and your vote.
The problem with commodification is twofold:
- Raising inequality - the more things are part of the market economy, that can be bought and sold, the greater importance money has, which means the worse off those who don't have any inequality.
- Corruption - Some things shouldn't be bought or sold. For example paying kids to read books turns reading from a passion to a chore crowding out. Making something a product pushes away values and worth, while giving a false sense of entitlement for those who have the money.
Markets don't care about the "ethical" value of a product, as long as someone is willing the pay, and the other is willing to sell, the only question that matters is "how much". We have let the market economy take control of our society, of how we view the world, and as 2008 crisis showed us, we are not in good hands.
We need to restore the debate around which things should be and shouldn't be part of the market economy.
- Today, the logic of buying and selling no longer applies to material goods alone but increasingly governs the whole of life. It is time to ask whether we want to live this way. (Location 77)
- The most fateful change that unfolded during the past three decades was not an increase in greed. It was the expansion of markets, and of market values, into spheres of life where they don’t belong. (Location 89)
- Where all good things are bought and sold, having money makes all the difference in the world. (Location 114)
- Putting a price on the good things in life can corrupt them. That’s because markets don’t only allocate goods; they also express and promote certain attitudes toward the goods being exchanged. (Location 118)
- Markets leave their mark. Sometimes, market values crowd out nonmarket values worth caring about. (Location 124)
- we drifted from having a market economy to being a market society. (Location 142)
- Part of the appeal of markets is that they don’t pass judgment on the preferences they satisfy. They don’t ask whether some ways of valuing (Location 189)
Jumping the Queue
We have lost the equality of our time, instead it has became a marketable resource. In airports, theme parks, roads and attractions, we can pay extra to avoid the queue and jump to the head of the line, thus converting money into time. The queue is no longer an equalizer, rather a sign that those who can't pay, will pay with their time.
But even that is not always a possibility, especially in markets with no declared prices, and of great importance, for example access to health care and political participation. For example, while choosing a doctor's appointment is largely free (among dates, not the doctor itself), it happens that people take appointments only to sell them at a higher price, or even doctors themselves offer same day appointments. Similarly, lobbyists pay homeless people to queue up for communities that offer seats to the general public.
The underlying assumption is that such practice is okay because a monetary price is a good indication of the product's value to the buyer, the more you value it, the more you are willing to pay. However, this ignores the fact that some, or even most, people can't afford it, even if they wanted to.
This results in products that goes to the highest bidder, and not those who needs or wants it the most, thus reducing overall utility which economists like to maximize.
It seems unfair that things that are meant to be allocated for free, such as political participation, are sold at a price fairness. Different types of goods have different moral norms. While we won't sell our house to the first bidder simply because they are first, we will stand in line at the supermarket or at the bus stop. Converting more and more first come first served rule based goods into market commodities is just one example of how markets invade and erode our lives.
- The case for markets over queues draws on two arguments. One is about respecting individual freedom; the other is about maximizing welfare, or social utility. (Location 387)
- the willingness to pay for a good does not show who values it most highly. This is because market prices reflect the ability as well as the willingness to pay. (Location 424)
Incentives
Basic economics assumes we are all Econs, well informed, rational agents who operate based on incentives and calculate expected utility out of every transaction we make, whether monetary or not. For example, people get married because their expected utility of being married surpasses their expected utility from remaining single or searching for other mates.
This type of reasoning has entered many areas of our lives, ones that are not considered "economical", such as relationships, and education. Some schools have begun paying children for better test scores or for reading books.
What this perception misses is that transactions are not always done freely, or informed. People can be coerced into certain choices, which doesn't reflect their true preferences coercion. For example, drug addicts who are paid for being sterilized doesn't really mean that they prefer money over having children.
Additionally, incentives leads to external motivation which crowds out intrinsic motivation. We become fixated on the reward, replacing our desire to be a better student for example with the desire to make more money. It gets worse once we realize that when the incentive stops, the behavior stops as well, thus defeating the purpose. change starts from the inside out.
Incentives also change the norm. Adding a price tag to something could be interpreted as "it's okay to do it as long as you pay", if for example littering was considered as unethical, but now you get a fine of 100, then you might consider doing it, as part of your general monetary calculations. What we consider as a fine which is supposed to deter bad behavior, can be perceived as a fee, a non-value price of preforming an action in a market based environment.
This creates a conflict between utilitarian results and moral norms. For example, you can pay a fee to get a permit to hunt a black rhino. The fee is so high that it incentivizes people to raise, care and protect rhinos, and evidently has lead to a great rise in the specie's population that was endangered beforehand. So on the one hand the result is a moral, worthwhile result - we have succeeded in saving an engendered specie. On the other hand, we say that "it's okay" to hunt animals as long as you can pay for it. It turns the action from morally wrong to market acceptable.
Since incentives have an effect on moral norms, economics is hardly a non-normative "cold" and closed ecosystem. Introducing an incentive must take into consideration not just economic reasoning, but also moral one.
- Under what conditions do market relations reflect freedom of choice, and under what conditions do they exert a kind of coercion? (Location 600)
- monetary motive crowds out other, better motives. (Location 790)
- They induce us to do the right thing for the wrong reason. Sometimes, it helps to be tricked. It isn’t easy to quit smoking or lose weight on our own. But eventually, we should rise above manipulation. Otherwise, the bribe may become habit forming. (Location 795)
- Economists often assume that markets do not touch or taint the goods they regulate. But this is untrue. Markets leave their mark on social norms. Often, market incentives erode or crowd out nonmarket incentives. (Location 868)
How Markets Crowd out Morals
Paying for something changes it's value. For example, "renting" a friend rather than genuine connection feels differently, same as giving money as a gift instead of a personal written note or something you made yourself, or consider buying a Nobel prize rather than "deserving" one. Attaching a price to something changes the way we perceive it. Similarly, research shows that paying for blood donations caused a drop, not a rise, in donation because it crowds out our moral desire to give to others.
Therefore, when market norms "economize" something, they hurt it twice fold. It makes it more expansive by forcing us to pay for something that could have been done for free, and it also hurt our values, by making us think and act like econs, denying us from committing acts of virtue, which would have only increased giving and altruism in our society to be moral is to act moral, and replaces it with monetary calculations. With a monetary price, people can't feel good for preforming the action, because it is as if they were rented for a service, rather than expressed their desire for doing good.
- financial incentives and other market mechanisms can backfire by crowding out nonmarket norms. (Location 1567)
- When people are engaged in an activity they consider intrinsically worthwhile, offering them money may weaken their motivation by depreciating or “crowding out” their intrinsic interest or commitment. (Location 1678)
- Altruism, generosity, solidarity, and civic spirit are not like commodities that are depleted with use. They are more like muscles that develop and grow stronger with exercise. One of the defects of a market-driven society is that it lets these virtues languish. To renew our public life we need to exercise them more strenuously. (Location 1805)
Markets in Life and Death
There are companies that take out or buy life insurance for people, and they get paid once they die. Often there is an issue of consent, for example workers who didn't know that their employers took out a policy on their name, benefiting once they die and leaving their family with nothing. However, even in cases with consent, for example elderly or sick people that get a one-time payment that permits companies to get policies on their behalf, seems morally objectionable. Something about investing in people's death and silently hoping that they would die sooner than later (as to increase Roi) seems wrong, even under the reasonable assumption that these companies don't do anything to actually harm to promote people's death. Such industry has no socially desired goal, it promotes nothing, it only allows the transfer of money from one place to another, when the medium is people's lives. Should we allow such an industry?
Naming Rights
The attention economy has reached everywhere, from our screens, to the products we buy, our streets and our sports, we literally can't look away from commercials because there is no place without them, we would have to close our eyes.
While they are the "natural" result of a free market, it diminishes the value of what we are trying to do. Watching TV or a game is less exciting, more annoying, and we feel as if the activity is just an excuse to see more ads.
It gets more problematic once advertising enters areas it shouldn't, and change the product on which it is advertised. For example, advertising can be inside jails and schools, affecting people who are more susceptible to influence, a captive audience with little chance of mental resistance. Also, textbooks that are sponsored by companies can include biases, misleading information and attempts to win over the audience through covert attempts, with the appearance of "objective" statements.
Similarly, advertising can be on things we think should remain untouched, such as public spaces, police cars, People's homes and even bodies.
- Do we want a society where everything is up for sale? Or are there certain moral and civic goods that markets do not honor and money cannot buy? (Location 2893)